From newborns to the elderly, diseases of the respiratory tract are a major cause of morbidity and mortality in the United States. For many of these diseases, there is a desperate need for effective treatments. A regenerative medicine approach using cell-based therapy could, in theory, drastically improve the lives of these patients. The long term goal of this application is to address critical hurdles to the development and application of alveolar and airway stem cells derived from induced pluripotent stem cells (iPSCs) as safe and effective cell-based therapies for lung disease. Significant progress has been made in deriving lung epithelial cells from human iPSCs over the past decade. Increasingly sophisticated directed differentiation protocols have produced more mature and functional airway and alveolar epithelial cells. Despite this progress, current protocols do not generate pure populations of cells. Knock-in fluorescent reporters have been used to purify lung epithelial cells and confirmed their similarity to primary controls but this approach is undesirable for cell-based therapies. There are crucial questions that must be addressed prior to the application of these cells to human patients. What tools are required to generate pure populations of lung stem cells and how can we best determine the safety and efficacy of those cells? In this application we address these key questions. First we develop a panel of new tools that will be required for clinically- relevant directed differentiation protocols through the application of cell-sorting strategies using antibodies against cell-surface makers to purify both alveolar (CKIT/CPM) and airway (ITGA6) stem cells from a panel of human iPSCs. These tools and protocols obviate the need for knock-in reporters, utilize serum-free defined media, and establish standardized manufacturing approaches that will be essential for successful IND applications of these novel cells. Next, and with support from the Regenerative Medicine Innovation Catalyst, we perform the most in-depth characterization to date of iPSC-derived alveolar and airway stem cells. These global proteomic, phosphoproteomic, metabolic/respiromic, transcriptomic, and genomic datasets will provide the research community with an essential resource. Safety of these cells in terms of genetic stability and tumorgenicity remains a major concern when considering clinical applications. We assess the safety profile of iPSC-derived airway and alveolar stem cells over long-term in vitro culture and in vivo. Finally, we assess the efficacy and potency of these cells. We employ established in-vitro assays to address fundamental questions of self-renewal and multi-lineage differentiation potential compared to primary controls and ultimately determine their capacity for engraftment in lung injury models in mice. At the conclusion of this proposal we will have developed new tools to purify alveolar and airway stem cells from iPSCs and will have established detailed datasets to provide a better understanding of the biology, safety and efficacy of these cells to share with the research community and move towards clinical translation.